moral hazard: "A situation in which someone insured against risks will purposely engage in risky behavior, knowing that any costs incurred will be compensated by the insurer. A financial system which offers "rescue packages" may encourage borrowers and lenders to undertake low-quality or high-risk investments, thus increasing the likelihood of a crisis."
Related: Markets Soar After Fed Cuts Key Rate By Half A Point (New York Times, 18 September 2007)
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